A reduction in output from some Chinese mills in recent weeks has created a shortage of steel billet, raising both local and import prices for the semi-finished material in the week ended Wednesday January 19.
In the major Tangshan market, spot market stocks of billet were at 283,000 tonnes on January 13, down by 233,000 tonnes from 516,000 tonnes on December 30, according to a local industry information provider.
Crude steel output from member mills of the China Iron & Steel Association (Cisa) was 1.97 million tonnes per day on January 1-10, down by 6% compared with the preceding 11 days.
Tight billet availability, combined with bullish market sentiment due to the recent release of sizable Chinese infrastructure bonds, raised physical billet prices in the country in the week, a major South Asia-based billet trading source said.